State and Metro Employment Conditions in May

Nearly 80 percent of the 372 metropolitan areas now have more jobs than one year ago according to the latest government statistics. Job growth has been especially strong in Dallas-Ft. Worth region, Austin, Orlando, and San Jose – all registering a blistering 3.5 percent or better employment growth rate. The housing and the commercial real estate markets will therefore continue to expand.

At the other end, there were some metro markets with job losses. Detroit, Peoria, Scranton, and Atlantic City have modestly fewer jobs now versus one year ago.

At the state level, North Dakota has been on top for quite some time. Oil and gas drillings have been a major boon for the state. Nevada, Texas, Florida, and Utah round out the top five. These fast job-creating states are known for low tax state and being business friendly. At the bottom sit Alaska, New Mexico, and Vermont. The full ranking of all the states is shown in the below table.

California baffles. Though widely perceived as a high tax and anti-business state, the Golden State made it to the top ten. Northern California in particular is booming and new job holders have been bidding up both home values and rents to sky high levels. The reason for the good job numbers is that many innovative new firms are starting out there – possibly because of an easier regulatory burden. Even the government is innovative at times. There is no stopping at a toll booth to cross the Golden Gate Bridge, for example, since automatic photographing of every passing license plate is sufficient. In other words, it is not always the local tax structure that matters but rather the ease of regulation. Entrepreneurs do not mind paying taxes so long as the red tape does not strangle them.

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.